Renegotiating accepted offers?

[DrFfybes]

We offered on a place a while back and were due to exchange and complete on 1st April.

We are cash buyers and our vendors are moving into an empty property so no chain involved, however as we were going to declutter into the new place then we haven't even had any viewings yet on our current house. This leave us potentially owning 2 houses in a very uncertain market.

I was talking to the Agent selling our home yesterday, and he says there is a lot of renegotiation going on at the moment. He's seen a huge number of offers withdrawn in the last couple of weeks, and people asking for quite substantial reductions in agreed prices if xcontracts hadn't been exchange. He didn't give figures, but I got the impression asking for 5%/25k or so wasn't uncommon, with one agreed at 562k dropping to 550k.

We are obviously considering doing the same, it isn't normally how we play things, but as our agent said our vendors will probably be asking as well. Our vendors are with Purplebricks so that useful buffer of an agent and their broad market experience isn't there, and neither MrsF nor I are particularly good at haggling anyway, so we're a bit uncertain about how to pitch this.

Does anyone know the sort of reductions people are asking for, and how common it is generally?

Paul

[Stonge]

Price to change is your issue.

The crux is you need to know how much the expected price on the property you're selling will drop or increase on accepted future offer.

[dealtn]

Does anyone know the sort of reductions people are asking for, and how common it is generally?

No idea.

But a more relevant question would be how much you want the house? If you offered less and the counterparty cancelled would that bother you? You were due to exchange contracts, but my reading is that you haven't yet. House purchases are emotional as well as financial decisions by both counterparties.

[Lootman]

Does anyone know the sort of reductions people are asking for, and how common it is generally?

a more relevant question would be how much you want the house? If you offered less and the counterparty cancelled would that bother you?

Yes, the one time a buyer asked me for a last-minute discount just before exchange I told him to get lost, and withdrew from the deal. I don't play games like that and don't expect other people to either.

But the real problem is that English law allows people to mess about in this way, both buyers and sellers. In many other countries the price is set by an accepted offer e.g. Scotland, the US and so on.

[johnhemming]

I had that myself, but was a little more accommodating and simply put the property on the rental market. The buyer had then the choice of paying the agreed price or if it was rented out they lost the deal. They paid the agreed price.

[DrFfybes]

Thanks for the info and opinions.

As I said at the sart, this is not somethig we would normally do, but things have changed materially since we first offered in November and agreed a price at the end of Jan. At that time we had an idea of what we would get for ours, which talking to the agents has changed somewhat.

We like the place, but we have seen others we like and it was really a heart decision to get this rather than a head one. I would be quite happy to cancel now and wait and see, but MrsF is still keen to go ahead.

If you were the seller at this point in time would you prefer to lose the sale or renedotiate, bearing in ming they can (and I suspect will) do the same.

[AsleepInYorkshire]

Part of my work involves negotiation. With money. Over 40 years I've begun to notice that most people negotiate from the heart. And this makes my job difficult. I don't have a one size fits all approach. I have a broad strategy. And I deploy different approaches to mould with the character I am negotiating with.

However, the simple truth of the matter is that for the most I am not negotiating but delivering bad news of a commercial nature. And this often means someone "feels" that I am the source of the problem.

One problem, two aspects. And it boils down to risk. If you go forward with the purchase now you are taking a risk. And those you are buying the house from take no risk. Fair? If you approach them with a new offer removing that risk from your side of the argument then they are taking the risk. Fair? And it's highly likely that if either party senses the outcome to be unfair they will not proceed. And in this case fairness amounts to the amount of money you [potentially] will take a hit on when you sell you own home.

You could try an all out "gift wrapped" delivery and ask the seller to drop all the amount. You won't get an answer over the phone. During the stand off period your seller will pick your "gift wrapped" delivery to pieces. And ultimately come up with one conclusion. You want them to bear all the risk. Then instead of it being a constructive negotiation it will become a game of cards. Who will blink first. During this time "emotions" will take over and the situation will deteriorate.

The viable alternative to progress is for both parties to accept some burden of pain. Preferably 50% each. Fair?

Delivery won't be as important then. You won't have to sell them a polished turd. You will be selling them the truth. And whilst they won't like it they will probably accept it as fair. And that will remove a huge amount of negative emotion and keep timelines short.

AiYn'U

[Gerry557]

Does anyone know the sort of reductions people are asking for, and how common it is generally?

a more relevant question would be how much you want the house? If you offered less and the counterparty cancelled would that bother you?

Yes, the one time a buyer asked me for a last-minute discount just before exchange I told him to get lost, and withdrew from the deal. I don't play games like that and don't expect other people to either.

But the real problem is that English law allows people to mess about in this way, both buyers and sellers. In many other countries the price is set by an accepted offer e.g. Scotland, the US and so on.

I had an offer "reduced" and I swapped to a second buyer on principle. The first, when realising he was now missing out then agreed to the offer price. Too late I informed him I was willing to take a slightly smaller offer not to be messed about. His wife came back pleading to get the deal back on, again it was turned down. Finally he increased his offer above his initial agreed for a quick deal. Fortunately I was in a position to refuse yet again and told him that I would never sell to him no matter what. I still remember his wife crying and berating him about loosing her dream home.

I was lucky to have a list of buyers and be in a fortunate situation that allowed me to do this and hate chancers trying it on. Hopefully more people will be able to do something similar. I can understand people pulling out right now with so much unknown but hopefully it's temporary.

I did get some silly initial offers which were ignored on another property but suspect there are some hoping to just get lucky on a desperate sale but this was at the start of the process rather than post an offer. I have heard of people asking for more to complete a sale too. I don't like the ethics of this. Especially when you have paid out for searches and surveys etc.

Maybe it's just me. I did ask for a none returnable once to agree a sale to try and prevent either side messing about but was advised it wasn't the done thing, pity.

[GoSeigen]

As others have said, you must take into account the other party's position as well as your own, and you MUST have a plan B for if your attempted renegotiation is rebuffed.

Story to contrast with Gerry557's: last year I bought a property and AFTER exchange, demanded a 20% reduction and also a deferment of 20% of the purchase price (claiming breach of contract terms). The sellers were absolutely desperate to sell and we were the only buyers. They could have released us from the contract or gone to court instead, but given their position and ours I think they were happy just to get over the line, even though the reduction was painful.

Large reductions can be achieved but only in very favourable circumstances.

GS

[johnhemming]

That sounds pretty unique. If raises the question as to what the breach was.

[Charlottesquare]

Does anyone know the sort of reductions people are asking for, and how common it is generally?

a more relevant question would be how much you want the house? If you offered less and the counterparty cancelled would that bother you?

Yes, the one time a buyer asked me for a last-minute discount just before exchange I told him to get lost, and withdrew from the deal. I don't play games like that and don't expect other people to either.

But the real problem is that English law allows people to mess about in this way, both buyers and sellers. In many other countries the price is set by an accepted offer e.g. Scotland, the US and so on.

Offer and unqualified acceptance in Scotland, and these days far more contracts get dragged out on a suspensive condition until closer and closer to settlement anyway, the concluded contact and then 3 months to settlement seems to be a thing of the past.

I suspect if I had agreed headline price and someone attempted to last minute vary that price my reaction would be as yours, no sale, or if I wanted to punish go back and say fine, you can now INCREASE your offer 5% for your temerity.

Back in the days when solicitors had standards a lot of law firms would have refused to continue to act for a client trying to shift the agreed price.

[GoSeigen]

That sounds pretty unique. If raises the question as to what the breach was.

Property with tenant in situ, our claim was that tenant failed to maintain property leaving significant damage relative to agreed condition before they were evicted. I think we claimed significantly more than the cost of the damage (some of which sellers also put right at their expense) but the sellers were in no position to fight as mentioned before. Point is: what is the negotiating strength of the respective parties?

GS

[AsleepInYorkshire]

That sounds pretty unique. If raises the question as to what the breach was.

Property with tenant in situ, our claim was that tenant failed to maintain property leaving significant damage relative to agreed condition before they were evicted. I think we claimed significantly more than the cost of the damage (some of which sellers also put right at their expense) but the sellers were in no position to fight as mentioned before. Point is: what is the negotiating strength of the respective parties?

GS

I think this is a good point. Each party has a position of leverage? The intrinsic part of any negotiation is to understand how that leverage will direct a parties behaviour. Thus potentially bringing emotion back into the fray. There will always be times when applying a highly leveraged position will work. I'd suggest given the OP's comments relating to his wife's "attachment" to the new property that they play the straight bat card. Not that I am disagreeing with you. Leverage is great. And if someone hands you that on a plate then it's correct to take it. But you really have to know it exists and the other party will bow to it before playing that hand. And as I've alluded to it then becomes literally a game of cards. And they have no certain outcome. They can be highly negative, stressful and extremely drawn out. Which for the most is ultimately what property purchasing seems to be about?

AiYn'U

[Stonge]

I think the OP also fears that property in general will be 'worth' quite a lot less in a year's time than it was last year.

That has to affect emotion.

[DrFfybes]

I think the OP also fears that property in general will be 'worth' quite a lot less in a year's time than it was last year.

That has to affect emotion.

More to the point, it will (probably) be worth a lot less by the time lockdown ends and we are allowed to proceed than it was 3 months ago when a price was agreed. As I have said twice, it is not about playing games, it is about adapting to rapidly changing market conditions. I spoke to our agent yesterday and he says over half of their offers have been withdrawn or reduced in the last week or so.

As some background - Vendor is self employed in leisure industry marketing and wanted to downsize and semi retire but said they were not in a rush and were prepared to wait until they got the price they wanted. That income will have chaged significantly but it isn't realy fair to take advantage of that. The other vendor works part time in childcare environment. They had no other offers and only a couple of viewings in Dec and Jan, although no surprise at that time of year. As both have run businesses they are quite experienced negotiators. I strongly suspect they will approach their vendors for renegotiation.

For us, we looked at thousands online, and visited 60 or so before deciding on this. It is a heart decision for this one, I have serious reservations about the work required to maintain the grounds and difficulty to extend and the cost involved, but MrsF loves the house, the area, and the garden. However we don't need to move, the driver was so we were not 5 hours away from mum, and still being handy for MrsF's family. We are also upsizing by quite a sum, so a market drop shrinks that gap, and MrsF is now commited to wrking in Devon for another 12 months anyway so would need to rent or B&B or not sell our current home.

This would have been sorted long ago had they accepted what I thought was a reasonable offer within 5% of the asking price. I'm tempted to pull out citing we want to see what happens in the market over the next few months, but leave the door open if they want to reconsider the price and let them decide if they want to remarket or not.

Paul

[Stonge]

If you have not exchanged contracts, I think it is entirely reasonable to say that, in light of the rapid change to just about everything caused by the cv19 disease but in particular property market conditions, you feel that you need to reassess both the selling price of your own property and therefore the offer you can afford to make on the property you desperately hope to buy.

I suspect there will be a bit more time for re-negotiations to take place.

We had a buyer reduce his offer, before exchange, allegedly because, in his opinion, the market had dropped.

We told him to go elsewhere, for a few reasons:

1. we could see no evidence of a drop in the market
2. he presented it as a 'take it or leave it' ultimatum, no discussion allowed
3. because of 2, we no longer trusted him and suspected that he could happily reduce his offer again on e.g.day of exchange

I'm sure these three difficulties would not apply to your discussions with your vendor and a mutually acceptable change to your offer could reached.

[Lootman]

We had a buyer reduce his offer, before exchange, allegedly because, in his opinion, the market had dropped. We told him to go elsewhere, for a few reasons

When that happened to me, as I described above, I was later told by the estate agent that that particular buyer had a reputation for doing that. Apparently he would put in offers fairly often, and then put in the minimum of due diligence, to keep his costs down.

Then, shortly before exchange, he would submit a lower offer. Presumably that works with some people and so it is a profitable strategy, especially if you are a cash buyer.

One clue if you have such a player is that the buyer seems very relaxed about things like performing local searches, performing property inspections and other steps that a normal buyer would typically do. They aim to spend the absolute minimum before lowballing you, expecting that you will tell them to get lost, but hoping that you will fold.

[AJC5001]

When that happened to me, as I described above, I was later told by the estate agent that that particular buyer had a reputation for doing that.

Given that the estate agent is supposed to be working for you, using their knowledge of and expertise in the property field, shouldn't you have been told this before you accepted the offer?

Adrian

[Lootman]

When that happened to me, as I described above, I was later told by the estate agent that that particular buyer had a reputation for doing that.

Given that the estate agent is supposed to be working for you, using their knowledge of and expertise in the property field, shouldn't you have been told this before you accepted the offer?

I thought the same thing. Apparently his reputation was not known to my agent at the time of the offer. But discovered later after this transpired. And yes, I'd like to think that such operators are named and shamed.

Not that I think this is the case here. Only that the seller might be thinking along these lines.

[kempiejon]

Given that the estate agent is supposed to be working for you... Adrian

Ah I think you have misunderstood estate agents then.